According to PwC, miners are using their strong balance sheets to reposition for long-term growth, particularly in critical minerals, which accounted for two-thirds of last year’s M&A deals.
- The demand for critical minerals, which are essential for the green transition, has intensified, with governments, sovereign wealth funds, and carmakers also seeking deals to secure supplies of these minerals.
- The race for critical minerals has caused governments to enter into agreements with other governments to collaborate on securing supplies of these minerals, particularly copper, lithium, and cobalt.
- The regulatory environment in South Africa has not focused on critical minerals, and there has not been much exploration or work to incentivize local beneficiation, which could result in global mining companies going elsewhere.
- The low net debt and substantial cash holdings of mining companies have allowed them to take advantage of strong commodity prices and pursue strategic acquisitions.
- The global mining industry is being reshaped by the competition for critical minerals, with national governments reconfiguring the competitive landscape through new rules and regulations.
- In the coming year, it is expected that prices will soften, costs will stabilize, capital spending will decrease, but dividends will remain high.